East Money Information Securities: Misalignment of supply and demand in the high-end market for automotive CIS, domestic substitutes accelerating rise.

East Money Information Securities released a research report stating that the double upgrade demand for CIS chips in car navigation systems in terms of pixel specifications and configuration numbers continues to strengthen. With the iteration of intelligent driving solutions in recent years (pixel mass production breakthroughs 8M specifications and high-end technology penetration), domestic manufacturers' global CIS market share is expected to increase significantly. It is recommended to pay attention to investment opportunities in domestic car CIS chip related manufacturers in the trend of localization substitution, focusing on high-pixel CIS, HDR and LFM technology upgrades, breakthroughs in car-grade certification, etc. The main points of East Money Information Securities are as follows: The penetration of intelligent driving is accelerating, and the CIS market is expanding rapidly Intelligent driving is currently undergoing a key iterative stage from L2 level functions to L3 level systems (L2 penetration rate currently at 40%). With the deep penetration of intelligent demand, the scale of sensor configurations has significantly increased. The basic solution of 2-3 sensors in traditional models has evolved into more than ten sensors in mainstream models with a multi-sensor fusion architecture. For example, Huawei ADS3.3 adopts an 11-camera configuration (front dual 8 million pixel solution). This kind of technological evolution continuously strengthens the double upgrade demand for CIS chips in car navigation systems in terms of pixel specifications and configuration numbers. Dual-wheel drive of technology market, CIS chip incremental growth can be expected Currently, CIS is at the core of car cameras. The industrial penetration of high pixel, HDR (high dynamic range imaging), and LFM (LED flicker suppression) accelerates, rapidly driving the industrial upgrade of CIS chips. Currently, the global CIS chip field shows a highly concentrated feature, with major players such as ON Semiconductor, Will Semiconductor, and Sony leading in the field of car CIS chips. With the popularization and high-end trend of multi-camera configurations for intelligent driving on the demand side, the global CIS chip sales revenue is far higher than the shipment volume, with rapid growth in demand for car CIS chips. By 2025, the size of the car CIS market will reach $33.32 billion, and by 2027, it will reach $48.58 billion, with great potential for growth. Accelerated breakthrough of domestic technology, clear space for high-end substitution Currently, the domestic leading car CIS chip manufacturer Will Semiconductor has formed a capacity binding with leading car manufacturers. Although overseas manufacturers can partially relieve domestic supply pressures, their high cost barriers and longer delivery cycles have created a differentiation competitive window for domestic CIS manufacturers, ushering in an accelerated opportunity period for domestic substitution.